kiwisaver statements survey 2020...‘too complicated’, mentioned by over one -third of this...
TRANSCRIPT
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KiwiSaver StatementsGeneral public research
July 2020
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Contents
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38
18
Background
Summary
Findings
KiwiSaver members’ influences and perceptions of value for money
KiwiSaver membership and retirement income landscape
KiwiSaver statement engagement
26 Response to KiwiSaver projections
2
44 Overall satisfaction with KiwiSaver scheme
33Response to KiwiSaver fees
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Background
The FMA commissioned Buzz Channel to conduct research among New Zealanders to understand their opinions on their KiwiSaver statements and how they use them. The main research objectives were to measure:
• Recall and readership of the annual KiwiSaver statements;
• Response to information about income projections and KiwiSaver fees;
• Perceptions of value for money of KiwiSaver schemes.
This is the third time the FMA has carried out KiwiSaver statements research and the second time that Buzz Channel has been involved. Previous studies took place in 2016 and 2018.
Throughout this report the 2020 results have been compared to previous studies where relevant and significant differences noted.
1,998 New Zealanders aged 18 years and over participated in the research through an online panel survey that ran between 16th
June and 5th July 2020. Of these 1,342 were KiwiSaver members (67%).
The margin of error on the total sample is +/-2.2%, and for KiwiSaver members is 2.7% (at the 95% confidence level).
The data has been weighted by gender, age, ethnicity, and region to ensure the sample is representative of the New Zealand population aged 18 years and over.
As context to this study, in 2018, it became mandatory for KiwiSaver providers to include in the annual statements information on total fees paid annually in dollar values, the total amount that an investor’s account grew by over the year and summary transaction figures detailing the money that has gone in and out of the investor’s account over the course of the year.
Further regulations have since been put in place that, from 2020 onwards, require providers to also include retirement savings and income projections in the annual statements. These changes were recommended by the Ministry for Business, Innovation and Employment, the FMA and the Commission for Financial Capability, and policy was introduced by Government to implement the changes. This was with a viewto improve KiwiSaver investors’ ability to make positive decisions about their retirement savings.
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Summary
Over two-thirds of New Zealand adults have a KiwiSaver membership and those who have joined are typically younger, have a higher personal income and are more likely to be working full-time than those who are not in the scheme.
The range of options across different KiwiSaver schemes attracts investors with different profiles
Men are over-represented within Growth schemes and this type of member is often younger, mid-earners, working full-time and more likely to have children at home. Women are over-represented within Conservative schemes and they are typically older. Those in Balanced schemes also attract an older investor profile. Aggressive schemes typically attract active investors who are younger and higher earners. Meanwhile, those in a default scheme are often younger than average, more ethnically diverse and more likely to be single and / or studying.
Most KiwiSaver members are committed to this form of investment
Over 6 in 10 KiwiSaver members state that continuing contributions is a priority despite recent market volatility. At the same time, confidence of having enough money for retirement is relatively low and members are more likely to disagree than they are agree that they’re on track to reach their KiwiSaverfund goals.
The majority of members reported growth in their investment return over the past 12 months
Investment return over the past 12 months is fairly evenly split between KiwiSaver members reporting growth, those reporting muted growth that was less than expected, those reporting a decrease and those who don’t know how their scheme has performed. Most who experienced a loss in return were anticipating this, although for 15% this information came as a surprise when they received their KiwiSaver statement.
Around 1 in 5 expect to rely solely on KiwiSaver and Super in retirement
For around 1 in 5 members, they anticipate KiwiSaver along with Super to be their only form of income in retirement. Two-thirds of members, however, expect to also have personal savings and around one-quarter expect to have an income from other share investments.
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Summary
KiwiSaver members’ propensity to read their statement has remained consistent over time
In 2020, 76% of members had either thoroughly read their statement (22%) or briefly read it (54%), comparable with results for 2018 (78%) and 2016 (79%). Those who thoroughly read their statement were significantly more likely to be in a non-default scheme, one that is actively managed and to anticipate other retirement income in addition to KiwiSaver.
Over the past three studies, around 1 in 10 KiwiSaver members indicated that they had not read their statement and do not intend to do so. Reasons for a lack of engagement have changed little over time. Most frequently members opt out of reading their statement simply due to a lack of interest.
The most useful aspects of KiwiSaver statements continue to be balance and personal contributions information alongside investment gains and losses
At least 8 in 10 of those who engage with their statement rate their balance information, their contributions information and details of investment gains and losses as ‘quite’ or ‘very’ useful. In general, perceptions of how useful different parts of the statements are have remained stable since 2018, often following an uplift between 2016 and 2018.
Although the majority engage with all of the different aspects of their statement, there is, however, an upward trend in the proportion of KiwiSavermembers unable to say how useful they found different aspects of their statement or who state that they didn’t read this part – in most cases, results have more than doubled between 2016 and 2020.
KiwiSaver members were more likely to notice new statement information or content in 2020
In 2020, 15% of those who read their statement noticed something different about the content or information included, a significant increase on the result of 9% in 2018. Most frequently, this new information related to income forecasts, mentioned by over one-third of this group.
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Summary
Around two-thirds found information on income projections helpful
When prompted, just over one-third of those who read their statement recalled seeing retirement income projections and this new mandatory information was well-received, with around two-thirds rating this aspect as ‘quite’ or ‘very’ useful. For around one-third of KiwiSaver members who noticed their retirement income projections, the amount is not what they expected, and most of this group are likely to be disappointed: there were nearly four times the proportion stating that projections were less than expected than there were stating that projections were more than anticipated.
Most anticipate needing more retirement income than their KiwiSaver can provide
Fewer than 3 in 10 who became aware of their retirement income through their statement feel that this will be enough to live on; over half are clear that they would need more income while nearly 2 in 10 either don’t know or haven’t given this any thought.
Retirement income projection information is clearly empowering KiwiSaver members
Nearly two-thirds of KiwiSaver members who noticed their income projections plan to take action as a result, most frequently through increasing their contributions which over half of this group intend to do.
Around 3 in 10, however, do not intend to take any action. While for over one-third of this group this is because they’re happy with the way things are, a larger proportion either feel that nothing they do now will make a difference, are worried about fee charges associated with making changes or don’t feel well enough informed to make a change.
There’s increasing transparency over KiwiSaver fees and around half of those who noticed fees information plan to take action as a result
The proportion of those who engaged with their statement and who noticed information on fees has increased significantly from 31% in 2018 up to 55% in 2020. This element of the statements is clearly valued, rated by over 8 in 10 as useful. In 2020, around one-third of those who noticed the fees felt that they were too high, consistent with results from 2018. Most who notice, however, feel that they’re ‘about right’ (54%). Around half of KiwiSaver members who noticed fees information on their statement plan to take action as a result, most frequently through comparing fees against other schemes / providers.
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Summary
Performance returns, a strong provider reputation, and fees are key deciding factors when selecting a scheme
What influences a KiwiSaver to select one provider over another does vary significantly across different demographic groups and understanding this can helpproviders understand which products to target to which parts of the market. For example, females place more importance on the ethical or social responsibility of a fund while older investors are more concerned with performance returns, fees and reputation.
Nearly 6 in 10 feel that their scheme offers value for money, and value perceptions are closely linked to performance returns and level of fees
Just under 6 in 10 KiwiSaver members rate their scheme as offering ‘good’ or ‘very good’ value for money and fewer than 1 in 10 are dissatisfied, rating value as ‘poor’ or ‘very poor’. Those in non-bank and non-default schemes have stronger perceptions that their funds offer value for money than those in bank and default schemes. When it comes to assessing value for money, members pay most attention to performance returns (which 65% feel is an important aspect of offering value for money) and level of fees (57%).
Positive perception of value for money aligns closely with attention paid to statements: 73% of those who read their statement thoroughly rate value for money as ‘good’ or ‘very good’, decreasing to 58% among those who briefly looked at it, 52% among those who haven’t yet done this but intend to, 43% among those who state that they do not intend to read their statement and 37% of those who don’t remember receiving a statement.
KiwiSaver members are more price-sensitive in 2020 and more partial to switch if they feel a competitor scheme offers better value for money
Consistent with results for 2016 and 2018, in 2020 KiwiSaver members were most likely to switch schemes if they felt that their fees were too high (55% would consider switching if they felt this), followed by assessing another scheme as offering better investment returns (40% would consider switching on this basis). On both counts, KiwiSaver members are significantly more likely to be ‘triggered’ to switch for these two reasons than was the case in 2016 and 2018, highlighting the market’s increasing level of price sensitivity and propensity to assess the value of KiwiSaver schemes.
In contrast, however, there are also signs that the market is increasingly educated about the drawbacks of switching schemes in a reactive way: just 28% indicated that they would consider making changes to their scheme if their fund lost money in the last year, an all-time low and significantly lower than the comparable result in 2016 (36%).
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Summary
Satisfaction with KiwiSaver providers saw an uplift at the top end in 2020 and overall around 8 in 10 are satisfied with their scheme
Nearly one-quarter of members were ‘very satisfied’ with their providers in 2020 compared to 16% in 2018. Overall, just under 8 in 10 were ‘quite’ or ‘very’ satisfied in both 2018 and 2020. The proportion of members ‘very satisfied’ increased across both bank and non-bank, default and non-default schemes in 2020. Non-bank schemes performed particularly well, related to perceptions of low fees, good performance and quality customer service.
The KiwiSaver profiles in this document represent responses of those in the survey. A full set of comprehensive KiwiSaver statistics can be found in the FMA’s annual KiwiSaver reports here : https://fma.govt.nz/news-and-resources/reports-and-papers/kiwisaver-report/
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KiwiSaver membership and retirement income landscape
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KiwiSaver membership Around two-thirds of New Zealanders aged 18 and over identified as being a member of KiwiSaver in 2020, and members are more likely to be younger, higher-earners and working full-time.
The proportion of New Zealanders aged 18 and over who identify as being a KiwiSaver member resettled back to 2016 levels after an uplift reported in 2018.
The 67% figure recorded in this study matches the finding from the Investor Confidence research that took place in May 2020.
It’s worth noting that this figure is likely slightly below the true incidence of membership within the population which, for adults aged 18 and over, was 73% in 2019 (based on 2.6 million members aged 18 and over reported in the FMA 2019 KiwiSaver Annual Report).
The slightly lower figure reported in this study may be related to inactive KiwiSaver members, those who have made a first-home withdrawal or those on a contributions holiday no longer identifying as having KiwiSaver (even though they technically still do).
KiwiSaver membership over time
Are you a member of a KiwiSaver scheme? Base: 2020 n=2,000; 2018 n=2,006; 2016 n=2,000.
10
67%
71%
67%
2020
2018
2016
Results significantly higher or lower compared to previous study
66%Aged <50
Compared to non-members, in 2020 KiwiSaver members are significantly more likely to be:
Younger: there are nearly twice the proportion of under 50s (66%) within the KiwiSaver members group as there are within the non-member group (34%).
Higher earners: 57% have a personal income of $50k annually or more – around double the proportion within the non-member group (27%).
Working full-time: more than three times the proportion are in full-time employment (50%) as compared to non-members (15%).
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Type of KiwiSaver fund
Please could you tell us what type of KiwiSaver fund you are in? Base KiwiSaver 2020 n=1,341, 2018 n=1,425
There has been little change in the proportion of KiwiSaver members in a default or non-default scheme.
In 2020, around three-quarters of KiwiSaver members indicated that they were in a non-default scheme, around 1 in 10 a default scheme with the remaining 17% unsure. There have been no significant changes when these results are compared with 2018.
Of those in a non-default scheme in 2020, there was a relatively even spread across Growth (40%), Conservative (33%) and Balanced (32%) fund types.
Those in a default scheme are significantly more likely than average to be:• Younger: with nearly three times the proportion aged
18-24 (30%) compared to non-default KiwiSavermembers (11%)
• More ethnically diverse: 22% identify as Māori compared to 14% of non-default members and the proportion identifying as Pakeha New Zealander / NZ European is significantly lower (55%) than within non-default members (65%).
• Single / not married: nearly twice the proportion identify as a single person who has never married (41%) comapred to those in a non-default scheme (23%).
• Studying: nearly three times as likely to be a student (14%) as those in a non-default scheme (5%).
See overleaf for a summary of key differences in profile across different non-default fund types.
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Type of fund (2020 compared with 2018): Type of non-default fund (2020 only):
11%
74%
17%
9%
76%
15%
Default
Non-default
Don't know2020 2018
40%
33%
32%
8%
3%
1%
1%
1%
Growth
Conservative
Balanced
Aggressive
Defensive
Sustainable or ethicalinvestment funds
Single sector funds
Other
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Profile across different fund types
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Those in a Growth scheme are significantly more likely to be:
Male: 54%, compared to half of all non-default scheme members
Younger: just 1 in 10 are aged over 60, around half the proportion across all non-default members.
Those in a Conservative scheme are significantly more likely to be:
Female: 6 in 10 are compared to half of all non-default members.
28%
Older: Nearly 3 in 10 are aged 60 or over compared to around 2 in 10 across all non-default members. They’re more likely to identify as an older couple with no children at home (23%) and be retired (12%).
Aged >60
Those in a Balanced scheme are significantly more likely to be:
Investing in retirement elsewhere: Only 11% are relying on KiwiSavercompared to 17% of all non-default scheme members.
44%Older: 44% are aged in their 50s or 60s compared to 33% across all non-default members. They’re more likely be an older couple with no children at home (26%)
Aged 50-69
10%Aged >60
Mid-earners: 43% earn between $50k and $100k annually, compared to 38% of all non-default members.
Working full-time: Nearly 6 in 10 work full-time compared to 55% across all non-default members.
From a household with young children: 1 in 5 have mainly school-aged children at home, compared to 16% across all non-default schemes.
Those in an Aggressive scheme are significantly more likely to be:
High earners: with double the proportion earning $150k or more annually (12%) compared to all non-default members (6%).
4%Aged >60
Younger: just 4% are aged over 60, compared to 19% across all non-default members.
Investors elsewhere: around 3 in 10 expect to have a retirement income from rental income and nearly 6 in 10 from shares (compared to around 2 in 10 and 3 in 10 respectively across all non-default members).
Please could you tell us what type of KiwiSaver fund you are in? Base KiwiSaver 2020 n=1,341, 2018 n=1,425
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Type of KiwiSaver fund Most KiwiSaver members are in a bank scheme and around 6 in 10 are aware if their scheme is actively or passively-managed.
Those who are in an actively-managed scheme are significantly more likely than average to be:• Male (58% compared to 52% of those in a passively-
managed scheme and 36% of those who don’t know how their scheme is managed).
• Saving for their retirement in other ways: 75% expect to have an income from personal savings when retiring and 30% anticipate income from shares.
• In full-time employment: 57% are employed full-time compared to 51% of those in a passively-managed scheme and 43% among those who don’t know how their scheme is managed.
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62%
30%
<1%
1%
7%
Bank Scheme
Non-bank Scheme
Employee Scheme
Another KiwiSaverprovider
I am a member ofKiwiSaver but I don't
know my provider
Please could you tell us what type of KiwiSaver fund you are in? Base KiwiSaver 2020 n=1,341, 2018 n=1,425
Type of fund (2020):
34%
26%
41% Actively
Passively
Don't know
Actively or passively
managed?
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KiwiSaver fund performance
In the past 12 months has the investment return of your KiwiSaver fund …?Base KiwiSaver: n=1,341
Investment return over the past 12 months is fairly evenly split between KiwiSaver members reporting growth, those reporting muted growth that was less than expected, those reporting a decrease and those who don’t know how their scheme has performed.
Those who read their KiwiSaver statement thoroughly were significantly more likely than average to report an increase (31%) or increase at a lower rate than anticipated (33%). Those who briefly looked at it were significantly more likely than average to report a decrease in return (27%).
Unsurprisingly, those who hadn’t yet read their statement or who don’t intend to read their statement were most likely to be unclear how their fund had performed (46% and 39% respectively).
Performance corresponds with overall satisfaction with KiwiSaver providers: those who are ‘not at all satisfied’ were around twice as likely as average to report a decrease, while those ‘very satisfied’ were significantly more likely than average to report positive performance (35% compared to 22% across all KiwiSaver members).
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25% 24% 22% 26% 3%
Decreased
Increased, but at a lower rate than anticipated
Increased
I don’t know
Not applicable - joined KiwiSaver less than 12m ago
Change in investment return of KiwiSaver over past 12 months (2020):
Those in a default scheme are significantly more likely than average to not know how their scheme has performed (39%)
Those in a Growth (29%) or Aggressive (42%) scheme are significantly more likely than average to have seen an increase
Those in a Growth (29%) or Balanced (31%) scheme are significantly more likely than average to report lower than anticipated increases
Those in a Growthscheme are significantly more likely than average to have seen a decrease (30%)
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Expectation of fund performance
Were you expecting losses to your fund before you received your statement? Which of the following best describes you? Base In the past 12 months have had investment return of KiwiSaver fund decrease: n=331To what extent do you agree or disagree with the following statement?...I was shocked by the changes in my fund value presented in my recent KiwiSaver statement. Base: 2020 KiwiSaver n=1,342
Most of the 24% of KiwiSaver members who reported a loss were anticipating this before they got their statement, but for 15% this came as a surprise. Overall around one-quarter of all KiwiSaver members agreed that they were ‘shocked’ by the changes in fund value presented in their statement.
Around half of the 24% of KiwiSaver members who reported a loss in return over the past 12 months were anticipating this before receiving their statement, and a further quarter knew their fund had decreased but not to the extent shown in their statement. For 13%, the losses were actually less than expected while for the remaining 15%, the losses were unanticipated before receiving their statement.
Those in a Growth scheme were significantly more likely than average to be anticipating losses ahead of receiving their statement (59%) while those in a non-bank scheme were more than twice as likely as those in a bank scheme to anticipate a larger loss than shown in their statement (22% vs. 10%).
Overall just over one-quarter of KiwiSaver members indicated that they were shocked by the changes in fund value presented in their recent KiwiSaver statement.
15
6% 23% 37% 20% 7%
Strongly disagree Disagree Neither disagree nor agree Agree Strongly agree
I was shocked by the changes in my fund value presented in my recent KiwiSaver statement (all KiwiSaver members):
26%
Agree or Strongly
agree
Expectation of losses to fund before receiving statement (among those who experienced a loss over the past 12 months):
Fully aware of the extent of losses before
receiving statement
47%Thought fund had
decreased, but not as much as shown in
statement
24%
Was anticipating a larger decrease than shown in statement
13%
Was not anticipating a loss before receiving
statement
15%
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Other types of retirement income
In addition to your KiwiSaver and NZ Super (Superannuation), which, if any, of the following sources of income do you expect to have when you retire? Base KiwiSaver: n=1425. Only non-default schemes with a sample of 80 or more are included in the table.
Most people will not rely solely on KiwiSaver in retirement: around 8 in 10 expect to have other forms of income in addition to their KiwiSaver and Super, most frequently through personal savings.
Two-thirds of KiwiSaver members are expecting to have personal savings to fund their retirement in addition to KiwiSaver and Superannuation – by far the most common additional income. Beyond this around one-quarter expect to have an income from shares (24%) and nearly 1 in 5 (17%) expect to have income from commercial or residential investment properties. For around 1 in 5, however, KiwiSaver and Super are the only forms of retirement income that they expect to have.
There are some significant differences in anticipated retirement income based on current type of KiwiSaverfund: • Those in a Balanced scheme are significantly more
likely than average to anticipate having personal savings and income from ‘other’ workplace / private pension schemes.
• Those in a Growth scheme are significantly more likely to expect to have personal savings and income from shares.
• Those in an Aggressive scheme are significantly more likely to expect an income from shares and / or rental properties.
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Expected retirement income in addition to KiwiSaver
All KiwiSavermembers
DefaultNon-default
Conservative Balanced Growth Aggressive
Personal savings 66% 66% 66% 75% 72% 77%
Shares investments 24% 18% 22% 27% 36% 57%
Rental income from investment properties 17% 15% 17% 20% 19% 31%
Other workplace private pension scheme
12% 18% 12% 17% 13% 20%
Other form of income on retirement 3% 3% 4% 5% 2% 1%
None of the above 21% 21% 22% 11% 15% 12%
Base 1,341 143 326 319 399 81
Blue figures are significantly higher than the result for all KiwiSaver members, red figures are significantly lower than the result for all KiwiSaver members
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Reasons for not being a KiwiSaver memberReasons for not being a KiwiSaver member
43%
21%
13%
10%
10%
9%
6%
6%
6%
6%
5%
4%
4%
2%
2%
42%
19%
15%
11%
11%
11%
7%
5%
7%
7%
8%
4%
6%
2%
4%
I've already retired or nearing retirement
Not currently employed
Can't afford to / income too low income unstable
Already have a superannuation scheme
Like to have control over my money
Already have savings
Haven't got around to joining
Don't know enough, need more information
Don't like money locked in until age 65
I'm self employed
Uncertain about how secure money is
There are better ways to prepare for retirement
Would prefer to pay off my mortgage
Not interested in saving for retirement
Another reason
2020
2018
Can you tell us why you are not a member of KiwiSaver?Base not a member of KiwiSaver: 2020 n= 656, 2018 n=581 (new question in 2018)
For those New Zealand adults aged 18 and over who are not currently a KiwiSaver member, the most common reason is because they are approaching retirement or have already retired. For those of working age, the most common reasons for opting out relate to being unemployed or have an unstable or low income.
Results over time show little change, with 2020 data showing no significant differences compared to 2018. It’s worth considering, however, the overall proportion of people indicating that they are not a KiwiSavermember has increased from 29% in 2018 to 33% in 2020, so in many cases there will have been an increase across results in real terms.
17
Results significantly higher or lower compared to previous study
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KiwiSaver statement engagement
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Readership over time
5%
5%
9%
10%
8%
4%
54%
58%
58%
22%
20%
21%
9%
9%
8%
I do not intend to read it I have not yet read it but I intend to
I briefly looked through it I read it thoroughly
I don't recall receiving my annual statement
2018
Readership of the annual KiwiSaver statement:
2016
Each year your KiwiSaver provider sends you an annual statement either in the mail or by email. The annual statement contains information about your KiwiSaver account and the money you have invested. Which of the following best describes what you did with your annual statement? 2020 Base KiwiSaver: n=1342; 2018 Base KiwiSaver: n=1425; 2016 Base KiwiSaver: n=1313
Engagement with KiwiSaver statements has been fairly consistent over the three studies. In 2020, just over three-quarters either briefly looked at or thoroughly read their statement.
Engagement with the statements varies significantly by different groups. In 2020, those who read their statement thoroughly were significantly more likely than average to be:• Male (56% vs. 47% across all KiwiSaver members)• In a non-default scheme (88% vs. 74%)• In a Growth scheme (39% vs. 30%)• In an actively managed fund (61% vs. 34%)• Anticipating other retirement income in addition to
KiwiSaver, particularly shares investments (33% vs. 24%) and personal savings (73% vs. 66%).
Those who briefly looked through their statement were significantly more likely than average to be:• In a passively-managed fund (29% vs. 26%).
Those who have not yet read their statement, but intend to were significantly more likely than average to:• Be aged 18 – 24 (26% vs. 15%).
And those who do not intend to read their statementwere: • Mostly unaware if their fund is actively or passively-
managed (75% vs. 41%)• Less likely than average to expect other forms of
income in retirement in addition to KiwiSaver (42% expect no other forms of income compared to 21% across the sample as a whole).
Have read briefly or
thoroughly
78%
79%
19
Results significantly higher or lower compared to previous study
76%2020
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Readership by type of scheme
Each year your KiwiSaver provider sends you an annual statement either in the mail or by email. The annual statement contains information about your KiwiSaver account and the money you have invested. Which of the following best describes what you did with your annual statement? 2020 Base KiwiSaver: n=1342
Reflecting the stability in results over time for statement engagement, there was also consistency in engagement across different types of scheme in 2020.
Those in non-default and / or non-bank schemes were the most likely to read their statements thoroughly (26% for both).
5%
6%
4%
4%
5%
10%
9%
10%
12%
8%
54%
55%
55%
54%
56%
22%
22%
26%
19%
26%
9%
9%
6%
10%
5%
I do not intend to read it I have not yet read it but I intend toI briefly looked through it I read it thoroughlyI don't recall receiving my annual statement
Bank
Default
Readership of the annual KiwiSaver statement:
All KiwiSaver members
Non-bank
Non-default
Base: n=143
Base: n=398
Base: n=986
Base: n=827
Have read briefly or thoroughly
78%
78%
69%
77%
84%
20
Results significantly higher or lower compared to previous study
2020 2018
76%
76%
80%
73%
82%
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44%
36%
21%
18%
14%
11%
8%
8%
1%
47%
28%
31%
24%
13%
27%
13%
7%
1%
27%
27%
24%
15%
9%
16%
20%
6%
5%
I'm not interested
It's too complicated
There is too much information
I can't understand the statement
The format of the statement is too hard to follow
I never read financial statements
I haven't had time
I already know this information
The information is not relevant
2020
2018
2016
Barriers to readershipReasons for not reading statement
Why didn't you read your statement?Base those who didn’t read the statement: 2020 n=69; 2018 n=72; 2016 n=113.
In 2020, most frequently people didn’t read their statements due to a lack of interest, consistent with results in 2018 where there was a significant uplift in those not interested.
After a lack of interest, the second most common reason for not reading the statements was that they are ‘too complicated’, mentioned by over one-third of this group.
The only significant year-on-year difference in 2020 was a decrease in the proportion indicating that they ‘never read financial statements’ that has more than halved from 27% in 2018 to 11% in 2020.
21
Results significantly higher or lower compared to previous study
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Usefulness of aspects on statement
1%
2%
2%
2%
5%
2%
3%
3%
3%
5%
8%
9%
10%
8%
10%
12%
8%
9%
39%
42%
39%
40%
39%
39%
43%
32%
30%
52%
43%
43%
39%
39%
38%
35%
36%
37%
3%
5%
7%
8%
9%
11%
7%
20%
22%
Not at all useful Not that useful Quite useful Very useful Don’t know/ didn’t read it
Usefulness of each aspect:
How useful did you find each of the following aspects of your statement?Base those who read KiwiSaver statement: 2020 n=1,017.
My current balance
My contributions
Investment gains and losses
Employer contributions
Performance & info about the fund
Fees information
The tax paid
Information on KiwiSaver members’ balance, their contributions and investment gains and losses were rated the most useful aspects of the statements.
At least two-thirds of those who read their statement found each tested element of the statement ‘quite’ or ‘very’ useful, ranging from 66% for the projected weekly income amount on retirement up to 90% for the current balance information.
It’s worth noting that there is evidence to suggest some respondents may have answered how useful they found each element of their statement in theory – that is they were indicating a preference for different types of information – as opposed to first-hand experience. See page 29 for further explanation of this.
90%
84%
79%
82%
78%
Quite or very useful
78%
78%
22
Projected lump sum for retirement*
Projected weekly retirement income *
68%
66%
*New questions added in 2020
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Usefulness ratings over time
1%
1%
1%
5%
5%
5%
39%
32%
32%
52%
61%
61%
3%
1%
1%
How useful did you find each of the following aspects of your statement?Base those who read KiwiSaver statement: 2020 n=1017; 2018 n=1111; 2016 n=1043.
My current balance
The contribution amounts from me
2%
3%
1%
8%
6%
7%
42%
40%
46%
43%
49%
46%
5%
3%
1%
Not at all useful Not that useful Quite useful Very useful Don’t know/ didn’t read it
2018
2016
2018
2016
In general, perceptions of how useful different elements of the statements are have remained fairly constant since 2018.
There are, however, a few exceptions:• A significant decrease in the proportion of those who
read their statement in 2020 finding the current balance information ‘very useful’ compared to 2018, with an attendant uplift in the proportion rating this as ‘quite’ useful.
• A significant decrease in the proportion rating the information on their personal contributions as ‘very’ useful (decreasing from 49% in 2018 to 43% in 2020).
• Significant increases in the proportion who didn’t read the information relating to their current balance (rising by 2 percentage points to reach 3% in 2020) or information about their contributions (rising by 2 percentage points to reach 5% in 2020).
• Related to this last point, although not necessarily a significant change year-on-year for each measure, there is an upward trend in the proportion of respondents unable to say how helpful they found each aspect of their statement in 2020 shown here and over the next two pages. Across all measures the proportions selecting ‘don’t know / didn’t read it’ is at a record high and has been trending upward over the course of the three studies.
93%
93%
Quite or very useful
89%
92%
23
Results significantly higher or lower compared to previous study
2020 90%
84%2020
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Usefulness ratings over time
2%
1%
1%
9%
9%
14%
39%
39%
42%
43%
45%
39%
7%
5%
4%
Investment gains and losses
The fees information
2018
2016
2018
2016
In some cases, KiwiSaver members were significantly more likely to rate different areas of their statement as helpful in 2018 compared to 2016, and this higher result has been maintained in 2020.
The helpfulness rating of information on investment gains and losses and fees information was stable in 2020. This stability follows a significant increase in the proportion rating these aspects as helpful in 2018.
84%
81%
Quite or very useful
80%
78%
24
Results significantly higher or lower compared to previous study
2020 82%
79%2020
How useful did you find each of the following aspects of your statement?Base those who read KiwiSaver statement: 2020 n=1017; 2018 n=1111; 2016 n=1043.
2%
2%
1%
10%
12%
17%
40%
42%
48%
39%
38%
30%
8%
6%
4%
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Usefulness ratings over time
The contribution amounts from my employer
The tax paid
3%
2%
1%
12%
12%
15%
43%
46%
49%
35%
33%
32%
7%
6%
3%
Not at all useful Not that useful Quite useful Very useful Don’t know/ didn’t read it
2018
2016
2018
2016
Financial performance and other information about the fund I am invested in
2018
2016
The contribution amount from employers, financial performance and information on tax paid have been rated as ‘very’ or ‘quite’ helpful by around 8 in 10 over the past three studies.
Again, there is stability in how helpful those who read their statement found these aspects of the information provided. The only significant difference in 2020 was an uplift in the proportion who found the information on contribution amounts from employers ‘not that useful’, rising by three percentage-points to reach 8%.
Please note that year-on-year helpfulness rating comparisons are not included for projected lump sum and projected weekly retirement income information since these aspects were only measured for the first time in 2020.
82%
87%
Quite or very useful
80%
74%
79%
81%
25
Results significantly higher or lower compared to previous studyHow useful did you find each of the following aspects of your statement?
Base those who read KiwiSaver statement: 2020 n=1017; 2018 n=1111; 2016 n=1043.
78%2020
78%
78%2020
5%
6%
3%
8%
5%
8%
39%
39%
44%
39%
43%
43%
9%
7%
2%
2020 2%
3%
2%
10%
10%
18%
39%
39%
43%
38%
41%
31%
11%
8%
5%
![Page 26: KiwiSaver Statements Survey 2020...‘too complicated’, mentioned by over one -third of this group. The only significant year- on-year difference in 2020 was a decrease in the proportion](https://reader035.vdocuments.us/reader035/viewer/2022070911/5fa99917c6015b7fa90eb574/html5/thumbnails/26.jpg)
Response to KiwiSaverprojections
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Attitudes towards KiwiSaver
To what extent do you agree or disagree with the following statements?…Based on my current retirement investments, I think I’ll have enough money for my retirement; Based on the estimated projection in my recent KiwiSaver statement; I’m on track to reach my KiwiSaver fund goals; Continuing KiwiSaver contributions is a priority despite recent market volatility; I can't afford to make changes to KiwiSaver contributions now. Base: 2020 KiwiSaver n=1342.
Most KiwiSaver members are committed to this form of investment, with over 6 in 10 saying it’s a priority despite recent market volatility. At the same time, confidence of having enough money for retirement is relatively low and members are more likely to disagree than they are agree that they’re on track to reach their KiwiSaver fund goals.
Over 6 in 10 KiwiSaver members agree that continuing their KiwiSaver contributions is a priority, despite recent market volatility.
KiwiSaver members are more likely to disagree (35%) than they are to agree (29%) that based on their current investments they will have enough money for retirement. Similarly, they’re more likely to disagree (28%) than agree (25%) that based on estimated projections, they’re on track to reach KiwiSaver fund goals, although members were more likely to remain neutral on this point (34%) than they were to either agree or disagree.
27
13% 22% 28% 22% 7% 8%
Based on my current retirement investments, I think I’ll have enough money for retirement:
29%
Agree or Strongly
agree
9% 19% 34% 19% 6% 13%
Based on estimated projection in recent statement, I’m on track to reach KiwiSaver fund goals:
25%
4% 8% 22% 34% 27% 5%
Continuing KiwiSaver contributions is a priority despite recent market volatility:
62%
5% 15% 32% 27% 15% 6%
Strongly disagree DisagreeNeither disagree nor agree AgreeStrongly agree Not applicable / don't know
Can’t afford to make changes to KiwiSaver contributions now:
42%
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Awareness of new statement content
Did you notice anything different about the content / information included in your KiwiSaverstatement this year? Base those who read KiwiSaver statement: 2020 n=1,018, 2018 n=1,111. ‘Please specify’ open-ended responses were coded, 2020 n=157.
A significantly higher proportion of those who read their statement noticed new information or content this year than in 2018.
When those who read their statements were asked if they noticed anything different about the content or information included this year, 15% stated that they did, significantly higher than the equivalent proportion of 9% in 2018. When asked to specify what they noticed, most frequently this was the new forecasted retirement income which 35% mentioned.
3 in 10 of those who noticed something different mentioned their balance dropping or reduced interest (often mentioned alongside COVID-19 market fluctuations) and just over 1 in 10 noticed information related to the COVID-19 impact.
A further 11% of this group felt that there was more information and options generally presented in their statement this year, and 7% noticed more information on fees / tax included in their statement.
28
Results significantly higher or lower compared to previous study
Yes, 15%
No, 85%
35%
30%
12%
11%
7%
3%
3%
5%
2%
Forecasted the amount will have byretirement
Balance drop / reducing interest (due toCovid)
Provided information about Covid-19 i.e.impact
The general detail / layout - i.e. moreinfo, options, about the changes
The fees/tax - shows changes andbreakdown
Increase on returns / growth
The balance
Other
Don't know
Please specify what you noticed that was different:
Noticed anything different
about content in statement?
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Recall of seeing projected income
This year, for the first time, all KiwiSaver statements included an estimate of your projected balance at retirement. Did you notice this in your statement this yearBase those who read KiwiSaver statement: 2020 n=1,018.
When prompted, just over one-third of those who read their statement recalled seeing an estimate of their projected balance at retirement.
Among those who read their statements, there are some groups who were significantly more likely than average to have noticed this new feature in their statement:• Those in their 50s (44%)• Those in Growth funds (43%)• Those with other retirement income sources in
addition to KiwiSaver, particularly those with private work pension schemes (48%)
• Those who are ‘very satisfied’ with their KiwiSaverprovider (42%).
The projected income information was well-received with around two-thirds of those who read their statements rating this aspect as ‘quite’ or ‘very’ useful (see data in full on page 22).
The fact that more people rated this aspect of their statement as helpful than recalled seeing this information when prompted suggests that some rated the usefulness of this aspect of the statement in theory (rather than experience).
29
Yes, 34%
No, 54%
Don't know, 12%
Noticed estimate of projected balance at
retirement?
Those who noticed were more likely to be aged in their 50s, in a Growth fund and ‘very satisfied’ with scheme provider
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Response to projected balance
Now that you’ve seen how much your potential KiwiSaver retirement income will be, is this…?Base those who noticed estimate of projected balance on statement: 2020 n=346.
For around one-third of KiwiSaver members who noticed their retirement income projections, the amount is not what they expected. Disappointment is more common than a pleasant surprise: there are nearly four times the proportion stating that projections are less than expected than there are stating that projections are more than anticipated.
Although over half of those who noticed their retirement income projection information indicated that the amount was around what they were expecting (55%), this information can come as a surprise for some. Over one-quarter indicated that projected amounts were less than they expected, nearly four times the proportion (7%) who indicated that projected amounts were more than they were expecting.
Those in bank schemes were around twice as likely as those in non-bank schemes to indicate that projections were less than anticipated (32% vs. 17%). There were, however, no significant differences in results based on default or non-default scheme membership.
Fewer than 3 in 10 feel that their projected KiwiSaverretirement income will be enough to live on; over half are clear that they would need more income while nearly 2 in 10 either don’t know or haven’t given this any thought.
Those in their late 20s (aged 25 – 29) who noticed their income projections were significantly more likely than other age groups to feel that this income would be enough to live off – this was the opinion of around half in this group, compared to around 1 in 5 among those in their 40s and 50s who felt this.
30
26% 55% 7% 13%
Less than you were expecting Around what you were expecting
More than you were expecting Not applicable - I didn't know what to expect
Projected KiwiSaver retirement income is:
Yes, 28%
No, 54%
Don't know, 12%
Not thought about it, 6%
Is projected KiwiSaver retirement
weekly income enough to live
on?
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Actions in response to projected balance Most KiwiSaver members who noticed the retirement projections on their statement plan to take action in response to this information, most frequently through increasing their contributions which around half of this group intend to do.
For 63% of KiwiSaver members who noticed the information on their projected income, they now intend to take action as a result. By far the most popular response is an intention to increase KiwiSavercontributions which nearly 4 in 10 who noticed their projections intend to do (37%, over half of those who intend to take some form of action).
For 3 in 10 KiwiSaver members who remembered seeing the information on income projections on their statement, however, there was no intention to take any action. A further 7% were unsure if they would take action or not.
31
Results significantly higher or lower compared to previous study
Based on your projected KiwiSaver balance on retirement, are you planning to take any of the following actions? Base those who noticed estimate of projected balance on statement : n=346
37%
10%
9%
6%
6%
6%
5%
4%
7%
30%
Increase KiwiSaver contributions
Seek professional financial advice
Change your KiwiSaver fund type
Contact your KiwiSaver provider to discuss theprojection
Change KiwiSaver provider
Decrease KiwiSaver contributions
Suspend KiwiSaver contributions
Use online tools to find out more about my KiwiSaverprojection
Don't know
No not planning to take any action
Planned actions based on projected KiwiSaver balance on retirement:
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Reasons for not taking any action
Are any of the following reasons for you not planning to take any action? Base those not planning to take any action based on projected KiwiSaver balance: n=103
There are a variety of reasons why some who were informed of their income projections through their statement do not intend to take any action. Although for over one-third of this group inaction is due to satisfaction with the way things are, a larger proportion do not feel empowered to make a change.
For the 3 in 10 KiwiSaver members who noticed their projected income but are not intending to do anything as a result, over one-third indicate that this inaction is simply due to being happy with their KiwiSaver as it is (35%).
Nevertheless there is a sense of powerlessness for many within this group who either feel that changes they make now will have little impact on the end result (30%), or who feel too ill-informed to make a change (11%), or have concerns about associated fees from making a change (7%).
32
35%
30%
11%
7%
3%
I'm happy with my KiwiSaver as it is
I don't think changes I make now will have muchimpact on how much I end up with in my fund
I don't feel well enough informed to make changes
Im worried about charges and fees associated withmaking changes
Dont know
Reasons for not taking any action :
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Response to KiwiSaver fees
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Fees information
Your statement also includes details of the fees you pay for your KiwiSaver scheme. Did you notice this in your statement this year? Base read statement: 2020 n=1,017; 2018 n=1,110.
Fees are becoming more visible within KiwiSaverstatements: in 2020 over half of KiwiSaver members who read their statement recalled seeing fees information.
At 55%, the proportion of KiwiSaver members who read their statement and recalled seeing fees information increased significantly in 2020, from 31% in 2018. Results were consistent across different scheme and fund types.
Propensity to notice fees information was also consistent across different demographic groups with the exception that those with a personal annual income of $100k or more were significantly more likely than average to recall seeing the fees information (70% of higher earners noticed compared to 54% of those earning less than $100k annually).
34
Noticed fees, 55%
Didn't notice fees, 33%
Unsure, 12%
Noticed fees, 31%
Didn't notice fees, 50%
Unsure, 18%
20202018
Results significantly higher or lower compared to previous study
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Fees information
Did you notice if the fees were presented in … ? Base noticed the fees: n=560. (new question in 2020)How useful did you find the information about your KiwiSaver scheme’s fees? Base noticed the fees: n=560
1 13% 54% 29% 3%
Not at all useful Not that useful Quite useful Very useful Don’t know
Usefulness of KiwiSaver scheme fees:
The information on fees is clearly valued with over 8 in 10 of those who noticed this information rating it as useful.
Most frequently those who noticed fees information recalled seeing only the dollar amount (37%), although around 3 in 10 noticed both the dollar amount and percentage of fund value.
35
Noticed both the dollar amount and %
of fund value
31%
Noticed the dollar amount only
37%
Noticed the % of fund value amount only
5%
Were unsure of what was presented
28%
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Perception of fees KiwiSaver members’ response to fees in 2020 was consistent with results for 2018. Most frequently fees are found to be ‘about right’, although around 3 in 10 think that they’re too high.
Results for perception of fees were relatively stable across different fund types, although those in passively-manged schemes (61%) and those who reported an increase in return over the past 12 months (69%) were significantly more likely than average to feel that their fees are ‘about right’.
Fees were mentioned as a reason for low satisfaction with providers overall by around 1 in 5 of those dissatisfied (explored in more depth on page 49). It’s therefore unsurprising that dissatisfaction aligns with a perception that fees are too high: 62% of those who noticed the fees and who were dissatisfied overall felt that fees were too high compared to 28% of those who noticed the fees and were satisfied with their provider overall.
36And thinking again about the fees you pay for your KiwiSaver, do you think they are …?Base noticed the new info: 2020 n=560; 2018 n=347
Too low2%
About right54%
Too high32%
Don't know11%
2020
Too low, 4%
About right53%
Too high30%
Don't know12%
2018
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51%
19%
15%
14%
13%
2%
6%
53%
30%
17%
14%
9%
2%
1%
No, not planning to take any action
Compare my fees against other schemes/providers
Use KiwiSaver comparison tools
Consider changing my KiwiSaver scheme or provider
Ask my provider to clarify their fees
Do something else
Don't know2020
2018
Actions taken, or planning to take, as a result of fees information:
Have you, or are you planning to, take any action based on this information?Base noticed fees info: 2020 n=555; 2018 n=347
Around half of KiwiSaver members who noticed fees information on their statement indicated that they’re considering taking action as a result, most frequently through comparing fees against other providers.
Propensity to take action as a result of engaging with fees information was similar in 2020 as it was in 2018, although there have been some significant shifts in what people are intending to do.
Although the most common action remains comparing fees against other schemes / providers, likelihood of doing this decreased significantly from 30% in 2018 to 19% in 2020. Elsewhere there was a significant increase in the proportion intending to ask their provider to clarify their fees (up from 9% in 2018 to 13% in 2020) and the proportion who were considering taking action but weren’t yet sure how (up from 1% in 2018 to 6% in 2020).
Actions as a result of KiwiSaver fees
37
Results significantly higher or lower compared to previous study
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KiwiSaver members’ influences and perceptions of value for
money
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Influences when deciding on KiwiSaver
When it comes to deciding on a KiwiSaver provider, how important is each of the following to you? Base 2020 KiwiSaver: n=1,342
When deciding what KiwiSaver scheme to join, KiwiSaver members are most strongly influenced by performance returns followed by a provider’s reputation and level of associated fees. In each case three-quarters of members or more feel that this is an important consideration when choosing a fund.
Quality of communications and advice offered are also important to the majority when deciding what provider to go for, with 69% and 65% respectively feeling these are ‘important’ or ‘very important’ considerations. Less important – although still a consideration for around 6 in 10 – is the active management of a fund and ethical or social responsibility status of a fund. Considered of least importance among factors tested are a provider’s personal engagement with its members (although this is still important for around half) and the passive management of a fund (important for 4 in 10).
There are some key variations in results based on the type of scheme a member is currently in: • Across the board, and unsurprisingly, those in non-
default schemes are more strongly influenced by each factor than those in default schemes.
• Those in a non-bank scheme place greater importance on personal communications (77%, ‘important’ and ‘very important’ combined compared to 68% of those in a bank scheme).
• Those in a Growth scheme place particular importance on the quality of a provider’s communications (76%).
• Performance returns are a strong influence for those in a Balanced (88%), Growth (87%) or Aggressive (92%) scheme and active management is key for those in a Growth scheme (69%).
• Meanwhile, those in Balanced funds pay particular attention to associated fees (83%) and provider reputation (84%).
39
1
1
1
2
1
2
4%
2
2
4%
6%
5%
7%
7%
7%
10%
12%
10%
13%
15%
17%
19%
23%
23%
24%
32%
36%
36%
40%
42%
46%
39%
36%
35%
36%
28%
43%
36%
33%
23%
26%
24%
23%
16%
13%
2
3%
3%
3%
4%
8%
4%
3%
11%
Not at all important Not importantNeither unimportant nor important ImportantVery important Don’t know
Importance of each aspect:
Performance returns of the fund
Reputation of KiwiSaver Provider
Level of Fees
Advice offered
Active management of the fund
Quality of communications
Ethical / socially responsible
management of fund
79%
76%
69%
75%
61%
Important or very
important
65%
57%
Personal engagement with me
Passive management of the fund
51%
40%
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Influences when deciding on KiwiSaver
When it comes to deciding on a KiwiSaver provider, how important is each of the following to you? Base 2020 KiwiSaver: n=1,342
What influences a KiwiSaver to select one provider over another does vary significantly across different demographic groups and understanding this can help providers understand which products to target to which parts of the market.
Key differences include: • Females appear to place greater importance on the
ethical / social responsibility of a fund, with 62% indicating that this is important to them (‘important’ and ‘very important’ combined) compared to 52% among males.
• Younger KiwiSaver members are less concerned with performance returns: 66% of those aged under 30 feel this is important compared to 85% among those aged 30 and over.
• There’s a similar picture with associated fees which are less important to those aged under 30 with 61% feeling this is important compared to 80% among older KiwiSaver members.
• Meanwhile provider reputation is more of a deciding factor for older KiwiSaver members, particularly among those in their 60s where 87% feel this is important. This compares, for example, to 63% of those in their mid to late 20s who feel this is important.
• There’s a general pattern of those in full-time employment placing more importance in each factor than other ‘working status groups’, and those unemployed place least importance in each factor. Performance returns (84%) and quality of communications (73%) are, in particular, of higher importance to those employed full-time.
40
84%
87%
61%
66%
62%
62%
63%
80%
85%
52%Men (n=635)Women (n=702)
Aged 30+ (n=983)Aged under 30 (n=359)
Aged 30+ (n=983)Aged under 30 (n=359)
Aged 25 - 29 (n=157)Aged in 60s (n=164)
Unemployed (n=125)Employed full-time (n=222)
Ethical / socially responsible management of fund
Performance returns of the fund
Level of Fees
Reputation of KiwiSaver Provider
Performance returns of the fund
% rating ‘important’ or ‘very important’ when deciding on a KiwiSaver provider by key demographics
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Perceived value for money
Rating of the KiwiSaver scheme being good value for money:
How do you rate your KiwiSaver scheme in terms of providing good value for money for what you get? Base 2020 KiwiSaver: n=1,342. Please note that the scale options were changed in 2020 so data is not comparable with previous studies.
Just under 6 in 10 KiwiSaver members rate their scheme as offering ‘good’ or ‘very good’ value for money and fewer than 1 in 10 are dissatisfied, rating value as ‘poor’ or ‘very poor’.
The stronger the positive perceptions are for value for money, the higher the engagement with KiwiSaverstatements.
Those in non-default and non-bank schemes rate value for money more highly than those in bank and, in particular, default schemes where fewer than half (46%) rate value for money positively.
Among non-default schemes, those in Growth funds are the most likely to rate value for money positively (72%) and those in actively-managed schemes are more satisfied with value for money (71%) than those in passively-managed schemes (58%).
Positive perceptions of value for money also align closely with attention paid to statements: 73% of those who read their statement thoroughly rate value for money as ‘good’ or ‘very good’, decreasing to 58% among those who briefly looked at it, 52% among those who haven’t yet done this but intend to, 43% among those who state that they do not intend to read their statement and 37% of those who don’t remember receiving a statement.
41
2%
2%
2%
2%
2%
5%
6%
4%
8%
5%
25%
27%
20%
28%
23%
40%
42%
39%
37%
44%
18%
15%
27%
9%
22%
9%
8%
9%
15%
4%
Very poor Poor Neither poor nor good Good Very good Don't know
Bank
Default
All KiwiSaver members
Non-bank
Non-default
Base: n=143
Base: n=398
Base: n=986
Base: n=827
58%
57%
66%
66%
Good or Very good
46%
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65%
57%
40%
39%
38%
28%
28%
23%
14%
Performance returns of the fund
Level of fees
Reputation of KiwiSaver Provider
Active management of the fund
Quality of communications
Advice offered
Ethical socially responsible management of the fund
Personal engagement with me
Passive management of the fund
Influences on value for money
And looking at the same list as previously, which of the following aspects of service do you think are most important when it comes to offering value for money for your KiwiSaver scheme? Base 2020 KiwiSaver n=1,341.
When it comes to assessing value for money of a scheme, KiwiSaver members pay most attention to performance returns and level of fees.
KiwiSaver members were shown the same list of factors as when asked what is most important to them when choosing a provider, and asked to select which they felt were most important when it comes to delivering value for money. The majority selected performance returns (65%) and level of fees (57%), making these the two most important factors.
Reputation, active fund management and quality of communications are all relatively important to positive value perceptions, each selected by around 4 in 10.
Those who read their statement thoroughly were significantly more likely than average to feel that quality of communications and reputation play a role in creating value for money (both selected by 47% within this group).
42
Most important aspects when it comes to offering value for money:
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55%
40%
28%
21%
17%
16%
14%
12%
12%
9%
47%
35%
30%
24%
17%
18%
17%
15%
10%
11%
46%
36%
36%
20%
17%
18%
13%
8%
11%
If my fees seemed high
If another provider achieved better investment returns
If my fund lost money in the last year
If I wanted to change the type of fund with my provider
If I changed jobs
If I received a oneoff lump sum that I wanted to invest in myKiwiSaver
If / when I reached a milestone age
If / when I paid off my mortgage
If I wanted to reduce my contributions
If another provider asked me to switch to their scheme
2020
2018
2016
Why people make changes to the scheme
What is most likely to prompt action to make changes to KiwiSaver schemes?:
What do you think would be most likely to prompt you to make changes to your KiwiSaver scheme? Base KiwiSaver: 2020 (excl don’t knows) n-1,117; 2018 (excl don’t knows) n=1,208; 2016 n=1,313.
In 2020, KiwiSaver members are becoming more price-sensitive and partial to switching if they feel competitor schemes offer better value for money. They are, however, less likely to make changes on the basis of recent losses in the value of their fund than previously.
Consistent with results for 2016 and 2018, in 2020 KiwiSaver members were most likely to switch schemes if they felt that their fees were too high (55% would consider switching if they felt this), followed by assessing another scheme as offering better investment returns (40% would consider switching on this basis). On both counts, KiwiSaver members are significantly more likely to be ‘triggered’ to switch for these two reasons than was the case in 2016 and 2018, highlighting the market’s increasing level of price sensitivity and propensity to assess the value of KiwiSaver schemes.
In contrast, however, there are also signs that the market is increasingly educated about the drawbacks of switching schemes in a reactive way: just 28% indicated that they would consider making changes to their scheme if their fund lost money in the last year, an all-time low and significantly lower than the comparable result in 2016 (36%).
Option added in 2018
43
Results significantly higher or lower compared to previous study
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Overall satisfaction with KiwiSaver scheme
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Overall satisfaction with provider
Overall, how satisfied are you with your KiwiSaver provider? (new question in 2018)Base 2020 KiwiSaver: n=1,342; 2018 KiwiSaver: n=1,425
Overall satisfaction with current KiwiSaver provider:
All K
iwiS
aver
mem
bers
Satisfaction with KiwiSaver providers saw an uplift at the top end in 2020, with nearly one-quarter of members ‘very satisfied’ with their providers.
Overall satisfaction with KiwiSaver is high, with around 8 in 10 members ‘quite’ or ‘very’ satisfied in both 2018 and 2020. ‘Top end’ satisfaction grew in 2020, with a significant uplift in the proportion ‘very satisfied’ which rose 7-percentage points from 16% in 2018 to 23%. Rather than being driven by a particular KiwiSaverproduct, this uplift was seen across most different fund types – explored further in the following pages.
Those members who had seen an increase on their return in the past 12 months were significantly more likely than average to be ‘quite’ or ‘very’ satisfied (91%), however over three-quarters (77%) of those who had seen a decrease were also satisfied.
As with positive perceptions for value for money covered in the previous section, the stronger the engagement with KiwiSaver statements, the higher the likelihood to be satisfied with providers: 88% of those who read their statement thoroughly were ‘quite’ or ‘very’ satisfied, decreasing to 81% of those who briefly looked at their statement, 75% among those who have yet to read it but intend to, 71% who do not intend to read it and 51% among those who don’t recall receiving a statement.
There were no significant differences in overall satisfaction levels based on different demographic groups.
79%
Quite or very
satisfied
78%
45
2%
1%
10%
10%
56%
62%
23%
16%
10%
11%
Not at all satisfied Not that satisfied Quite satisfed Very satisfied Don’t know
2020
2018
Results significantly higher or lower compared to previous study
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Overall satisfaction with provider by bank / non-bank
Overall, how satisfied are you with your KiwiSaver provider? (new question in 2018)Base 2020 KiwiSaver: n=1,342; Bank 2020 n=827; Bank 2018 n=835; Non-bank 2020 n=398; Non-bank 2018 n=590
Overall satisfaction with current KiwiSaver provider:
2%
2%
1%
1%
1%
10%
9%
10%
11%
10%
56%
61%
64%
51%
58%
23%
20%
15%
30%
19%
10%
8%
10%
6%
12%
Not at all satisfied Not that satisfied Quite satisfied Very satisfied Don't know
Bank
All KiwiSaver members
Non
-ban
kThe proportion of members ‘very satisfied’ increased across both bank and non-bank schemes in 2020. Non-bank schemes performed particularly well, related to perceptions of low fees, good performance and quality customer service.
While non-bank schemes were more highly rated than bank schemes in 2018 (based on the level of members ‘very satisfied’), the gap widened in 2020. Bank schemes still saw a significant uplift in the proportion ‘very satisfied’, but non-bank schemes out-performed bank schemes, with the proportion ‘very satisfied’ rising from 19% to 30%.
Respondents were asked to provide further context for their satisfaction levels (explored further on pages 48 and 49). The particularly high level of satisfaction among non-bank scheme members may be related to lower fees (offered as a reason for high satisfaction among 10% compared to 3% for bank scheme members), strong performance (mentioned by 23% of satisfied non-bank scheme members compared to 16% of bank scheme members) and good customer service (20% vs. 14%).
79%
81%
79%
77%
Quite or very
satisfied
82%
46
2020
2018
2020
2018
Results significantly higher or lower compared to previous study
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2%
2%
2%
2%
1%
10%
17%
16%
9%
9%
56%
53%
57%
58%
65%
23%
16%
8%
27%
19%
10%
12%
18%
4%
6%
Not at all satisfied Not that satisfied Quite satisfied Very satisfied Don't know
Overall satisfaction with provider by default / non-default
Overall, how satisfied are you with your KiwiSaver provider? (new question in 2018) Base 2020 KiwiSaver: n=1,342; Default 2020 n=143; Default 2018 n=126; Non-default 2020 n=986; Non-default 2018 n=1,083
Overall satisfaction with current KiwiSaver provider:
2020
Defa
ult
All KiwiSaver members
2018
Satisfaction levels increased at the top end for both default and non-default schemes.
In both 2018 and 2020, those in a non-default scheme were more likely to be ‘quite’ or ‘very’ satisfied than those in a default scheme.
Top end satisfaction increased across both fund types in 2020, doubling from 8% of default members being ‘very satisfied’ in 2018 to 16% in 2020, and 19% of non-default members ‘very satisfied’ in 2018 to 27% in 2020.
Among non-default schemes, those in a Growth scheme were significantly more likely than average to state that they are ‘very satisfied’ with their provider in 2020. Elsewhere there were no significant variations based on different fund type.
79%
84%
Quite or very
satisfied
65%
47
Non
-def
ault
2020
2018
69%
85%
Results significantly higher or lower compared to previous study
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Reasons for satisfaction with provider
Can you tell us why? Base 2020 KiwiSaver: n=1,342; Base Satisfied (Quite satisfied + Very satisfied) n=1,057
High satisfaction is grounded in efficient, strong performance and good customer service.
Among the 79% who were ‘quite’ or ‘very’ satisfied with their provider in 2020, when asked the reason for this responses centred on their fund working well or efficiently (mentioned by 25% of those satisfied), performing well and offering good returns (22%) and being strong on customer service through being easy to deal with, transparent and providing good communication (20%).
48
Results significantly higher or lower compared to previous study
Most common reasons for satisfaction (responses to open-ended question, coded)
25%
22%
20%
7%
6%
6%
4%
General positive - no problems / working well / efficient
Good performance / investments - good returns / gains /growing steady
Good customer service - easy to deal with, understanding,transparent, good communication
Easily accessible online / great online tools - easy to use,manage, follow, customise online
Low, reasonable and fair fees / lower fees than others
Happy with scheme /provider - reliable, reputable, trustworthy
Has remained steady and bouncing back despite COVID-19 /recession / tough economic times
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Reasons for lack of satisfaction with provider
Can you tell us why? Base 2020 KiwiSaver: n=1,342; Base Not satisfied (Not at all satisfied + Not that satisfied) n=156
Dissatisfaction with providers is most frequently based on perceived low performance and poor customer service ratings.
Among the 12% who were ‘not at all’ or ‘not that’ satisfied with their provider in 2020, when asked why feedback most commonly related to perceived poor performance and losses (35%) followed by low quality customer service due to a lack of communication and information being hard to understand (29%). A further 1 in 5 within this group also mentioned high fees or tax rates when explaining their dissatisfaction.
49
Results significantly higher or lower compared to previous study
35%
29%
20%
6%
4%
4%
Poor performance - have lost money / not showing growth /disapointing, low returns
Poor customer / admin service - lack of communication,understandable information, updates
High fees and tax rates / don't agree to the fees and tax I amcharged
Never wanted it / was forced on me / want to change providers
Others seem to be doing better / can do better elsewhere /negative review
Don't know enough / don't understand KiwiSaver or finances
Most common reasons for lack of satisfaction (responses to open-ended question, coded)
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Example quotes – satisfied with provider
Can you tell us why? Base KiwiSaver: n=1,342
“Easy to navigate through my account and have had no issues receiving contact back after enquiring
about something.”
“Have never had any concerns, I receive a statement annually and if [there have been] any relevant changes
they make contact via post.”
“I feel my funds are managed by a well-regulated, secure provider with a good credit rating.
Communications are adequate and non-intrusive and I can easily track transactions on the well designed
website/app.”
“Because my bank does it all for me and I can see things changing online.”
“I really like [my scheme]. They donate to causes. They are very upfront with the state of things. I also
like how the funds are managed passively, hence the low fees.”
“It seems to have good returns and I had a good experience with them when I withdrew for my first house. Fees are also low, and I can convert flybuys points into KiwiSaver which is a big bonus for me.”
“Excellent communication with well managed funds.”
“Great communications and simplicity of understanding annual statements / reports.”
“Regular updates, portal access to view my fund information 24/7, easy to make additional one-off
payments into the fund, reputable and well-regarded fund manager.”
“Despite COVID, things are going well and my KiwiSaver hasn't suffered as much as I'd expected.”.”
50
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Example quotes – not satisfied with provider
Can you tell us why? Base KiwiSaver: n=1,342.
“Fees too high, returns too low, communications ineffective.”
“No-one can explain anything to me. And I have lost a lot of money due to fees.”
“[When] I changed my funds from Growth to Conservative it took ages to get actioned. And I think
the fees are not based on performance. If you made [a] loss, the fee is still fixed. It should be reflective of the
gains.”
“No communication, no detailed information and very low return.” “I have been in this scheme a while now and have had
little to no communication apart from the annual statements. No advice as to which would be the best
place to invest my money for returns especially as I am fast approaching the retirement age. I think overall the lack of communication to see how I'm getting on or if
I'd like to change etc or simply to see if I wanted a change to what fund I'm in; they seem to expect the
individual to look and to organise all that.”
“Other than contributions from myself and employer, our money isn’t making money. And if you consider what
interest the money could be making by investing it into the bank (little to [a] lot depending on [the] type of account) in interest. Also paying fees on my own money that isn’t
collecting interest is robbery.”
“Terrible returns and lack of information - I have no real idea what's going on with my KiwiSaver. It definitely
won't be enough for retirement!”
“Think it could be managed better, more advice about when it’s good to change schemes.”
“The fact that the funds go up and down quite drastically, and the admin fees and management fees
are high, and the tax is on already taxed money.”
51
“I actually have no idea what they actually do, I just get random emails every so often.”